Data centers are driving up electricity costs across the country. In areas near data centers, wholesale electricity prices have spiked by as much as 267% in the past five years, according to a recent Bloomberg News article. Montana may be next. In the past year, data center developers have announced plans for a half-dozen facilities in our state that will have enormous energy needs. Those developers keep promising bills will go down, but everywhere they build bills go up. Do they think Montanans can be duped so easily? Montana communities need to decide if they can afford these new neighbors.
High energy costs inflate prices across all sectors, which hurts families and businesses. Increasing energy costs can break budgets and create housing crises for folks living on a fixed income or living paycheck-to-paycheck.
NorthWestern Energy’s CEO and shareholders want data centers because more energy infrastructure spending means a guaranteed return on investment, and therefore more profits for executives and shareholders. Montanans should not be subsidizing these profits – not for our monopoly utility and not for Big Tech’s billionaires. Montanans should not have to decide what groceries to cut out this month because our energy bills are going up again to pad CEO pockets.
Proponents of data centers (i.e. NorthWestern Energy’s executives and the Big Tech developers on the Governor’s Energy Task Force) keep citing a single Lawrence Berkeley study that shows that adding new large customers actually lowers electricity rates because it can spread the big costs around. But this isn’t what’s happening in reality. They need to read the study more closely. That may be true in limited circumstances where major infrastructure investments aren’t necessary to connect and serve data centers, but that’s not the case for NorthWestern Energy. It will need major investments to serve data centers. Bills will go up. In fact, there are dozens of other studies that demonstrate that the public is subsidizing data centers through ever-higher energy bills.
In January, NorthWestern Energy will gain a larger ownership share in Colstrip because two of the plant’s six owners are done burning coal for good. NorthWestern has big plans for this extra capacity, and it will be feeding new data centers. But this is like being given a worn-out used car, and then planning to use it for endurance racing. NorthWestern will now be on the hook for $464 million in Colstrip maintenance costs. On top of that, we all pay NorthWestern a guaranteed return on investment on all the infrastructure they own. So, when they’re given a bigger chunk of the Colstrip power plant, we’ll all owe them more money. Nice deal for them!
NorthWestern has already signed Letters of Intent to serve up to 1400 MWs of electricity to data centers, which is way more than the 600 MW of “new” capacity they’re getting at Colstrip. And NorthWestern is actively pursuing more data center contracts! The greed has no end.
As a NorthWestern Energy customer, I don’t want to pay for an outdated power plant when there are more affordable and cleaner alternatives. Nor do I want to shoulder the costs associated with data centers. Big Tech isa huge moneymaker and they can pay the full cost of their own energy bill. Montanans shouldn’t be on the hook to make rich corporations even richer.
NorthWestern just raised rates – again. We can’t afford more rate increases on behalf of data centers.
Our state agencies and local governments have a responsibility to protect Montanans from subsidizing Big Tech’s energy bills – please reach out to them and insist that they do so.
Jim Morton was the long-time Executive Director of District XI Human Resource Council. Morton sits on the steering committee of Montanans for Affordable Energy.